The notion of what makes a business scalable is misguided

While there is now a new found covidian enlightenment that everything organic is good for health and business (pun intended!), it is interesting to dwell deep into what makes a business scalable in its true sense of the word.

The logic of using brute force (money, discounts, networks of influence) obviously can make businesses scalable for a few seasons provided that there is that security of someone sponsoring this growth to achieve a desired scale of operations.

The reasonable assumption here is to get to a point of scale in volumes and (or) ability to grow returning customers.

But then, when we look back at the past two decades, it presents an interesting evidence that businesses that are in the unicornian scale path especially so in service economies like India and China are new digital avatars of simple traditional service business models that did not deliver new digital customer experiences at a pace they should have ideally done.

Successful online businesses around matrimony, grocery, job searches, gigs, cabs et cetera are all businesses that were built around their trust and belief that consumers will adopt technology if we make their lives simpler or more exciting.

These are also examples of how new age tech businesses benefited from a lack of digital vision amongst the traditionally thinking incumbents.

Even successful technology businesses like ​Zoho, TechSmith, Envato, Gopro, Pleasenotes, in a broad sense, are all actually examples of valuable services that became sustainably scalable due to their insatiable appetite to innovate new digital experiences in context to their vision for customers.

Going asset light, embracing digital technologies, building online ecosystems and bringing efficiency of scale is something all valuable traditional and small businesses can aspire or achieve provided their digital business transformation is progressive.

The core to sustainable scale will always be the appetite to learn and consistently deliver something valuable while having the ability to think like a digital business.

Even when talking about products in context to scale, it is fairly evident to note that the average non-business consumer and customer is actually faster to adopt any product that adds value to them. Whereas, SaaS, B2B products are still very much dependent on sizable support teams, partners, distributors and consultants for successful product adoption.

The secret sauce to building a scalable business is not a particular genre of product or a service, but the vision, appetite, ambition, skill and learning abilities of entrepreneurs and leaders to re-imagine their customers’ journey in the increasingly connected online landscape.

All valuable traditional and service businesses have fundamentally important competitive barriers of entry and strong building blocks like hard earned reputation, delivery track record, assets, processes, perseverance and crucial domain knowledge.

When these valuable businesses continuously learn, adapt and innovate, they are best positioned to become the most scalable businesses.

Covid, ironically is now driving a new breed of value creators, enterprises and small businesses who are now actively innovating and diversifying their value proposition to customers who are willing to reward these businesses for giving them new experiences.

It will not be surprising to see a new pool of scalable businesses evolving from this urgency to transform and innovate.

The author of the article is Ashwin Sivakumar, co-founder and chief of digital business growth of the JugularSocial Group.